Correlation Between Deltex Medical and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Deltex Medical and BW Offshore at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Deltex Medical and BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deltex Medical Group and BW Offshore, you can compare the effects of market volatilities on Deltex Medical and BW Offshore and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Deltex Medical with a short position of BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and BW Offshore.
Diversification Opportunities for Deltex Medical and BW Offshore
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deltex and 0RKH is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore and Deltex Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Deltex Medical Group are associated (or correlated) with BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of Deltex Medical i.e., Deltex Medical and BW Offshore go up and down completely randomly.
Pair Corralation between Deltex Medical and BW Offshore
Assuming the 90 days trading horizon Deltex Medical Group is expected to under-perform the BW Offshore. In addition to that, Deltex Medical is 2.98 times more volatile than BW Offshore. It trades about -0.09 of its total potential returns per unit of risk. BW Offshore is currently generating about 0.02 per unit of volatility. If you would invest 2,494 in BW Offshore on December 4, 2024 and sell it today you would earn a total of 371.00 from holding BW Offshore or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.88% |
| Values | Daily Returns |
Deltex Medical Group vs. BW Offshore
Performance |
| Timeline |
| Deltex Medical Group |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| BW Offshore |
Deltex Medical and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and BW Offshore
The main advantage of trading using opposite Deltex Medical and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical position performs unexpectedly, BW Offshore can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BW Offshore will offset losses from the drop in BW Offshore's long position.| Deltex Medical vs. Pentair PLC | Deltex Medical vs. Finnair Oyj | Deltex Medical vs. Fevertree Drinks Plc | Deltex Medical vs. Air Products Chemicals |
| BW Offshore vs. Supermarket Income REIT | BW Offshore vs. Bigblu Broadband PLC | BW Offshore vs. Kaufman Et Broad | BW Offshore vs. Fevertree Drinks Plc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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